Write an elevator speech citing and defending your view

Assignment Help Finance Basics
Reference no: EM13897425

Q1. During a convention cocktail party you overhear a group of healthcare financial officers discussing ‘financing policy'. One finance officer wearing a black suit says that ‘control' is primary so debt should always be maximized. Another finance officer in a green sweater declares that ‘risk' is paramount and must be minimized. A third finance officer in a tracksuit insists that maximizing ‘income' is the only way to go.

Decide whether you agree with black suit, green sweater, or tracksuit. Write an elevator speech (10 sentences) citing and defending your view."

Q2. The following argument is made in support of ""black suit"". In 8 sentences, please state whether you agree or disagree with this argument, and why?

Personally, I think the debt argument is the most reasonable when trying to raise capital. It has significant advantages over equity, when done within reason.

1. Debt financing is generally available assuming your business has a good credit rating.

2. Interest payments and bank fees are tax deductible making them more efficient then equity. Costs for raising equity include legal, travel and accountant fees that are not tax deductible and can eat into 3-5% of the raise.

3. Debt is flexible with minimal initial cash flow impact can be short or long term based on the needs of the company. Equity is a long term commitment that cedes control of the company to others.

4. Debt has few compliance issues short of making the payments on time. Equity has cumbersome finance issues and regular reporting.

5. Risk - Debt can be a risk if the company becomes overextended and defaults. Careful debt capacity analysis prior to taking on additional loans help mitigate this risk.

Reference no: EM13897425

Questions Cloud

Determine is the oxidation state of the metal : Determine is the oxidation state of the metal in each of the following complexes. Draw ALL linkage isomers and stereoisomers for each complex CLEARLY showing enantiomers.
Template class definition : You have the following template class definition.  template  class mypair {
Invites user to enter a random string : Invites user to enter a random string of lower case letters 2)get the string on the same line as the invitation 3)checks correctness of input(if its only lowercase letters 4)computes number of letters that is not being used 5)program out puts the ans..
Approached to create a computer program : Your spouse's cousin's nephew's dog's trainer's best friend owns a restaurant.  That person is very bad at math and recently discovered that most customers have been significantly undercharged for meals. You have been approached to create a computer ..
Write an elevator speech citing and defending your view : Decide whether you agree with black suit, green sweater, or tracksuit. Write an elevator speech (10 sentences) citing and defending your view."
Use at least two programmer defined functions : C++ Using an input file similar to the one below, write a program to determine the highest concentration recorded and the number of days the photochemical oxidant concentration exceeded the standard; display number of days and percentage (based on th..
Design an application for the homestead furniture : Design an application for the Homestead Furniture Store that gets sales transaction data, including an account number, customer name, and purchase price. Output the account number and name, then output the customer's payment for each month for the ne..
Identify and classify the type of pericyclic reaction shown : Classify the sigmatropic rearrangement as an [n,n]-sigmatropic rearrangement, where n is an integer. Show how the classification is arrived at as part of your answer.
Prompts the user to enter the total number of cookies : 7. A box of cookies can hold 24 cookies, and a container can hold 75 boxes of cookies. Write a program that prompts the user to enter the total number of cookies, the number of cookies in a box, and the number of cookie boxes in a container.

Reviews

Write a Review

Finance Basics Questions & Answers

  Risk and return-coefficient of variation

Based on the following information, calculate the coefficient of variation and select the best investment based on the risk/reward relationship.

  Objective questions based on finance problems

How do public oversight boards help prevent financial statement fraud? About half of all financial statement fraud crimes involve:

  What is the variable cost per unit

Month Units produced Total costs March 10,000 $25,600 April 12,000 26,200 May 19,800 27,600 June 13,000 26,450 July 12,000 26,000 August 15,000 26,500 Using the high-low method, what is the variable cost per unit?

  Fhe projects coefficient of variation cv of

consider the following probability distribution of returns estimated for a proposed project that involves a new

  Find the today stock price

Suppose that you plan to by shares XYZ stocks today and hold it for two years. Your expectations are that you will not receive a dividend at the end of year one.

  What is the price of a 3-month

Tru-U stock is selling for $36 a share. A 3-month call on Tru-U stock with a strike price of $40 is priced at $1. Risk-free assets are currently returning .025% per month. What is the price of a 3-month put on Tru-U stock with a strike price of..

  Difference between pension and postretirement benefits

What is the difference between pension and postretirement benefits? What type of pension and other postretirement benefit plans the company offers to its employees? What are the reporting requirements for pension plans in the financial statements?

  Business owners equity at commencement of year

If opportunity cost of capital is 14%, compute the present value of business owners' equity at commencement of year.

  Complement the business travel market

How do SMERF groups complement the business travel market?

  Calculate the npv and irr for each type of truck

Annual net cash flows include depreciation expenses. Calculate the NPV and IRR for each type of truck, and decide which to recommend.

  What is its return on stockholders equity

Fondren Machine Tools has total assets of $3,850,000 and current assets of $856,000. It turns over its fixed assets 1.9 times per year. Its return on sales is 6.7 percent. It has $1,890,000 of debt. What is its return on stockholders' equity? Roun..

  The return on the market portfolio is currently 12 mobile

the return on the market portfolio is currently 12. mobile phone corporation stockholders require a rate of return of

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd